Iranian oil minister Bijan Zanganeh on Friday said his country wanted its share of the crude market to return to levels seen before Western nuclear sanctions were imposed on it 13 years ago.
The comments suggest Tehran might not join possible efforts by OPEC and Russia to cap production at the gathering in Algeria.
Earlier, Saudi Arabia’s energy minister Khalid Al-Falih also downplayed hopes for a cut in production.
At around 0745 GMT, US benchmark West Texas Intermediate was down 72 cents, or 1.51 percent, at $46.92 and Brent fell 68 cents, or 1.36 percent, to $49.24.
“Oil prices came under pressure following media reports of the Saudi oil minister’s comments that there was limited possibility of any agreement for major intervention during the planned informal meeting of OPEC members next month,” said EY oil and gas analyst Sanjeev Gupta.
Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries, advocated an output freeze earlier this year but no deal was reached after Iran, which is just emerging from sanctions, refused to join.
The strictures, aimed at curbing Tehran’s nuclear programme, were lifted in January.
“After a week of yoyo-ing on OPEC chatter and geopolitical concerns and with the jury still out on an OPEC production freeze, the near-term fundamentals along with supply concerns, will dominate price action on oil this week,” said Stephen Innes, a senior trader at OANDA.
Gupta said comments by Fed chair Janet Yellen on Friday signalling the possibility of a US interest rate hike within this year “boosted the dollar index and applied pressure on crude prices”.
Analysts said Yellen’s remarks raised the likelihood that the Fed will lift rates by the end of the year.
A strong dollar typically dents demand for oil as it becomes more expensive for anyone with weaker currencies.